Date: May 13, 2003

To: ERCOT Board of Directors

From: Beth Garza, TAC Chair, and Sam Jones, Chief Operating Officer

Subject:Approval of Commercially Significant Constraints (CSCs) and Congestion Zones for 2004

Issue for ERCOT Board of Directors

ERCOT Board of Directors Meeting Date: May 20, 2003

Agenda Item 8b: 2004 Congestion Zone Designations

Issue: Designation of Commercially Significant Constraints (CSCs) in the ERCOT transmission system and Transmission Congestion Zones for 2004.
Background/History: The ERCOT Protocols define two types of transmission congestion: (1) CSC Congestion and (2) Local or Operational Congestion. CSC Congestion is that transmission congestion that is determined to be “commercially significant” and is used to establish annual Congestion Zones. The Protocols require ERCOT to identify CSCs on an annual basis in the process described in ERCOT Protocols Section 7.2.1. ERCOT manages Zonal Congestion in accordance with Section 7.3. The costs of Zonal Congestion are directly assigned to the QSEs whose schedules cause Zonal Congestion. Section 7.5 provides QSEs a hedging tool, Transmission Congestion Rights (TCRs) that can be used to offset the costs of Zonal Congestion.
Discussion: The Congestion Management Working Group (CMWG), under the auspices of the WMS and TAC, completed its work early this year for the 2004 CSC recommendation. ERCOT Staff provided the underlying analysis, and the PUCT Staff has been involved in the review.
TAC recommends the following switching station paths as CSCs for 2004:
  • West to North – Graham to Parker and Graham to Benbrook
  • South to North – Sandow to Temple
  • South to Houston – South Texas Project to Dow (Velasco)
Resulting Congestion Zones for 2004 are as follows:
  • West 2004
  • North 2004
  • Houston 2004
  • South 2004
These recommendations are identical to the 2003 CSCs and Zones. Exhibit A to this memo presents a map that demonstrates the configuration of the 2004 Zones.
TAC also approved the following regarding the 2004 CSC and Zone designations:
  • South Texas Electric Cooperative (STEC) should continue to be granted a variance for 3 substation (load) buses, similar to last year, moving them from the Houston Zone to the South Zone (all the rest of STEC’s load is in the South Zone).
  • Bryan Texas Utilities (BTU) should be granted a variance to move the Dansby Power Plant from the Houston Zone to the North Zone (all of BTU’s load is in the North Zone).
ERCOT Staff will begin performing the analysis to determine the availability and number of TCRs for each CSC. ERCOT Staff and CMWG will continue analysis to determine if there are any Closely Related Elements (CREs) that may be implicated when system conditions shift CSC paths (See Protocols Section 7.2.1.3).
Key Factors Influencing Issue: Determination of CSCs and Congestion Zones is based both on a technical evaluation of limits in the system and a market evaluation of whether those limits have a commercial impact. CMWG, WMS, TAC, ERCOT Staff, and PUCT Staff have devoted significant effort in reaching the recommendation described above and shown in Exhibit A.
Alternatives:
(1) Approve TAC’s recommendation regarding CSCs and Congestion Zones as presented above and in Exhibit A; or (2) Reject TAC’s recommendation and remand to TAC with instructions.
Conclusion/Recommendation: TAC and ERCOT Staff recommend that the Board approve the CSC and Congestion Zones as presented herein, including the variances recommended for STEC and BTU.

Item 9b - 2004 CSCs and Congestion Zones for 20041